Kansas Angel Investor Tax Credit

Under the Kansas Angel Investor Tax Act, as codified at K.S.A. 74-8131 — K.S.A. 74-8137, effective January 1, 2005 as amended, an accredited investor is allowed a 50% tax credit on their cash investment of up to $50,000, per certified Kansas business per year. Additionally, for each tax year, an angel investor shall not be entitled to claim tax credits under this Act of more than $250,000.

“Angel Investor” and “Investor” mean an accredited investor who is a natural person or an owner of a permitted entity investor, who is of high net worth, as defined in 17 C.F.R. § 230.501(a) as in effect on the effective date of this act, and who seeks high returns through private investments in start-up companies and may seek active involvement in business, such as consulting and mentoring the entrepreneur.

“Permitted Entity Investor” means (A) any general partnership, limited partnership, corporation that has in effect a valid election to be taxed as an S corporation under the United States internal revenue code, or a limited liability company that has elected to be taxed as a partnership under the United States internal revenue code and (B) that was established and is operated for the sole purpose of making investments in other entities

A person who serves as an executive, officer, employee, vendor or independent contractor of the business in which an otherwise qualified cash investment is made is not an angel investor and such person shall not qualify for the issuance of tax credits for such investment.

Accredited angel investors must register as such to be eligible for the Kansas Angel Tax Credit in the Angel Investors section of this web site.